As millions of high-school seniors ripped open college-acceptance letters last week, a brewing student-loan scandal was dragging in a growing number of schools, for profit loan companies and government officials.
In recent years, while college tuitions have soared and federal funding of student grants and loans have languished, the nation’s for-profit student-loan industry has exploded into an $85 billion enterprise. Competing for students’ business has become so frenzied that "it’s become like the Wild West," says Barmak Nassirian of the American Association of Collegiate Registrars and Admissions Officers.
Now a growing number of complaints have prompted investigations by Congress, the U.S. Department of Education and, most aggressively, New York Attorney General Andrew Cuomo, who has sent letters to 400 schools and is probing 100 institutions.
Last month Cuomo announced plans to sue Education Finance Partners, a California firm, which he alleges has made illegal kickbacks (回扣) to school in exchange for placement on its coveted (觊觎) "preferred lenders" list. Lenders on such lists get the bulk of a school’s private loan traffic. While some colleges say they use these payments to fund more student aid, Cuomo said they shouldn’t be doing it "on the backs of middle-and lower-income students who will be paying off these loans for the next 30 years." The finance firm says it hopes to resolve the issue quickly.
Cuomo also launched investigations into stock grants made to financial-aid administrators at three prestigious universities (Columbia, the University of Southern California and the University of Texas) by Education Lending Group. Its subsidiary, Student Loan Xpress, is on each school’s list of "preferred lenders." All three schools said they are conducting internal investigations.
Meanwhile, the U.S. Department of Education is reviewing charges that a top official, Matteo Fontana, sold at least 10,000 shares of stock in Student Loan eXpress about a year after joining the agency. Before coming to the department, Fontana worked at Sallie Mae, the nation’s largest private providers of student loans. Late Friday, Cuomo subpoenaed (传召) Sallie Mae employee records. And John Ryan, president of the State University of New York, defended his decision to serve on the board of CIT Group. The board paid him about $150,000 last year.
Most college-loan offices aren’t out to rip off students, says Mark Kantrowitz, publisher of FinAid. org.. Before signing up for any private loans, he says, students should exhaust available publicly funded loans. And he cautions families to compare rates and read the fine print.

Education Finance Partners was accused of（）.

As millions of high-school seniors ripped open college-acceptance letters last week, a brewing student-loan scandal was dragging in a growing number of schools, for profit loan companies and government officials.
In recent years, while college tuitions have soared and federal funding of student grants and loans have languished, the nation’s for-profit student-loan industry has exploded into an $85 billion enterprise. Competing for students’ business has become so frenzied that "it’s become like the Wild West," says Barmak Nassirian of the American Association of Collegiate Registrars and Admissions Officers.
Now a growing number of complaints have prompted investigations by Congress, the U.S. Department of Education and, most aggressively, New York Attorney General Andrew Cuomo, who has sent letters to 400 schools and is probing 100 institutions.
Last month Cuomo announced plans to sue Education Finance Partners, a California firm, which he alleges has made illegal kickbacks (回扣) to school in exchange for placement on its coveted (觊觎) "preferred lenders" list. Lenders on such lists get the bulk of a school’s private loan traffic. While some colleges say they use these payments to fund more student aid, Cuomo said they shouldn’t be doing it "on the backs of middle-and lower-income students who will be paying off these loans for the next 30 years." The finance firm says it hopes to resolve the issue quickly.
Cuomo also launched investigations into stock grants made to financial-aid administrators at three prestigious universities (Columbia, the University of Southern California and the University of Texas) by Education Lending Group. Its subsidiary, Student Loan Xpress, is on each school’s list of "preferred lenders." All three schools said they are conducting internal investigations.
Meanwhile, the U.S. Department of Education is reviewing charges that a top official, Matteo Fontana, sold at least 10,000 shares of stock in Student Loan eXpress about a year after joining the agency. Before coming to the department, Fontana worked at Sallie Mae, the nation’s largest private providers of student loans. Late Friday, Cuomo subpoenaed (传召) Sallie Mae employee records. And John Ryan, president of the State University of New York, defended his decision to serve on the board of CIT Group. The board paid him about $150,000 last year.
Most college-loan offices aren’t out to rip off students, says Mark Kantrowitz, publisher of FinAid. org.. Before signing up for any private loans, he says, students should exhaust available publicly funded loans. And he cautions families to compare rates and read the fine print.